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Getting Serious About Google Product Listing Ads

One of the more interesting and promising developments of 2011 was the release from beta of Google Product Listing Ads (PLA). It merges the functionality and product specificity of comparison shopping engines with the broad reach of Google’s search audience, and is proving to be a very important component of a merchant’s performance marketing mix.

For those not familiar with PLA, these are the ads that typically show in the upper right hand corner of the search results page, next to and above the more traditional paid search text ads (click for an example). We’ve seen them appear in two, three, four, five and six spot configurations as well as in horizontal arrangements.

Google Product Listing Ads are different from the paid search text ads they appear next to in several important ways. For example, with PLA the “ad” comes primarily from the merchant’s feed to their Google Merchant Center account rather than from a copy writer. This is the same product feed that Google uses to power the free program Google Product Search.

Also, for PLAs merchants bid at the product level, not at the keyword level. For example, a shoe seller cannot bid on the term “black high heel shoes” for PLAs, but can raise his bid on all black high heel SKUs he has available.

Next, there is no certainty when and where PLAs will appear. While there’s no guarantee paid search text ads will always appear on the top and right hand side of the search results, we’ve come to expect it. Google determines when and where PLAs occur and right now there’s no sure fire way to know how much exposure you will get (though during the course of 2011 Google added impression reporting for PLA).

Across a cohort of merchant clients that were consistently active on paid search (i.e., text ads, referred to as Adwords below), Google Product Search, and PLA throughout 2011, client sales and traffic from PLA grew significantly, with growth particularly accelerating in the fourth quarter.

As a percentage of client paid search text ads sales, their PLA sales accounted for 19% of attributed sales in December for these clients. By the end of the year, their PLA sales accounted for about 13% of their total Google attributed revenue (Google Product Search + PLA + Adwords).

These results are typical of our client base that activated PLA later in the year. The figure below shows the acceleration. In the link above Google reported that users are twice as likely to click on a PLA as a text ad on the same page. For our clients this means PLA is a very high performing channel relative.

Going forward, I expect more volume from PLA and more good results, but also more competition. To succeed in PLA, here are seven tips for merchants.

Free up more budget specifically for PLA I would look at PLA not as a testing channel but as a growth channel. Google has already started to create more inventory for PLA (e.g., 5 spot ad placements) and has grown the program (e.g., Europe). They have every reason to continue to do so. Expansion by Google means more traffic opportunities for merchants who should be ready to capitalize on them.

Improve Google Merchant Center (GMC) feed quality and resolve all errors It is important to keep in mind that most PLA content comes from the GMC product feed. The best feed wins. Errors, inconsistencies, and poor product content will damage your PLA campaigns (as well as your Google Product Search performance). Do not abandon Google Product Search or sacrifice any efforts to optimize your GMC feed.

Be granular with your ad groups and bidding In our experience more granular product targeting and bidding yields better performance. While I can’t and won’t prescribe a specific number of ad groups a merchant should have, there should be a sufficient number to weed out poor performing products from good ones.

A helpful tactic to achieving this is to use the feed to enhance bidding. The Adwords UI allows you to set product targets by product brand, condition, and type, and using the Adwords editor you can and should add promotional text to each of your PLA ad groups. But with the right feed management tools you can also apply many tried and true techniques from the CSE and feed management tool kit like product filtering and bidding.

For example, you can (and probably should) build more targeted products targets based on a product’s individual performance, inventory levels, sales velocity and other factors and then bid by creating ad groups based on these more specific targets. These techniques help ensure you spend your money more exactly where and when you want to.

Bid aggressively, especially at first You should bid high on products when you first launch. This acquires traffic and helps build algorithmic relevance. Then dial down your bids or restrict products that you bid on to improve performance.

Add promotional text Don’t forget that these are ads. Using Adwords editor you can and should add promotional text to each of your PLA ad groups. This will help improve performance as well as make your PLAs look more appealing.

Apply Adwords campaign management best practices While PLAs are different than paid text ads, many of the same Adwords practices apply. We believe PLAs should be set up in their own campaigns for ease of management and reporting. Other tried and true PPC management techniques enabled by Adwords (most of which also apply to PLA) should also be used. Negative keyword matching is particularly important to ensure you don’t pay for clicks that are irrelevant to your products.

Measure Google traffic and performance holistically Look at your total return from Google (sales from Google Product Search, PLA, Adwords, and organic) and divide it by your total spend on Google. I’ve previously called this the Return on Google. For practical reasons you will still need to manage channels somewhat individually, but the interconnections between programs at Google and the extent to which their algorithms do or do not use signals across programs are complex and probably unknown, or at best unclear.

Therefore, I encourage you to consider Google as an aggregator of an audience – measure how much of that audience you get, what it costs you to get your share, and how much you get from it. It’s easy to get super-granular but keep the big picture in mind, too.